What changed in this filing

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Item 1. Financial Statements

2026-03-20 compared with 2025-12-19 · 268 added, 160 removed, 769 unchanged (36% of the section changed)

3 unchanged sentences

(Dollar amounts in millions, except per share data)

Three months ended Six months ended

November 30, November 30, November 30, November 30,

Three months ended Nine months ended

February 28, February 28, February 28, February 28,

2026 2025 2026 2025

9 unchanged sentences

Other components of net periodic benefit (cost) ( 0.3 ) ( 0.2 ) ( 1.0 ) ( 0.8 )

Other non-operating income (expense) ( 1.6 ) — ( 1.6 ) —

Gain on sale and leaseback transactions 119.8 — 118.2 —

Earnings (loss) before income taxes 91.8 ( 28.4 ) 70.7 ( 50.2 )

8 unchanged sentences

(Dollar amounts in millions)

Three months ended Six months ended

November 30, November 30, November 30, November 30,

Three months ended Nine months ended

February 28, February 28, February 28, February 28,

2026 2025 2026 2025

9 unchanged sentences

(Dollar amounts in millions, except per share data)

November 30, 2025 May 31, 2025 November 30, 2024

February 28, 2026 May 31, 2025 February 28, 2025

(unaudited) (audited) (unaudited)

6 unchanged sentences

Prepaid expenses and other current assets 57.6 47.9 64.2

Assets held for sale 350.7 — —

Total current assets 735.3 725.3 757.0

21 unchanged sentences

Operating lease liabilities 27.7 26.8 25.5

Liabilities held for sale 18.5 — —

Total current liabilities 621.1 626.4 616.7

2 unchanged sentences

Operating lease liabilities 251.3 91.5 84.4

Film related obligations — — 13.3

Other noncurrent liabilities 36.5 35.7 43.9

54 unchanged sentences

Balance at November 30, 2024 0.8 $ 0.0 27.3 $ 0.4 $ 603.5 $ ( 55.8 ) $ 998.7 $ ( 560.8 ) $ 986.0

Net Income (loss) — — — — — — ( 3.6 ) — ( 3.6 )

Foreign currency translation adjustment — — — — — ( 8.0 ) — — ( 8.0 )

Pension and post-retirement adjustments (net of tax of $ 0.1 )

— — — — — 0.1 — — 0.1

Stock-based compensation — — — — 2.4 — — — 2.4

Proceeds pursuant to stock-based compensation plans — — — — 0.1 — — — 0.1

Purchases of treasury stock at cost — — ( 1.5 ) — — — — ( 30.6 ) ( 30.6 )

Treasury stock issued pursuant to equity-based plans — — 0.1 — ( 0.7 ) — — 1.2 0.5

Dividends ($ 0.20 per share)

— — — — — — ( 5.6 ) — ( 5.6 )

Balance at February 28, 2025 0.8 $ 0.0 25.9 $ 0.4 $ 605.3 $ ( 63.7 ) $ 989.5 $ ( 590.2 ) $ 941.3

Class A Stock Common Stock Additional Paid-in Capital Accumulated

26 unchanged sentences

Balance at November 30, 2025 0.8 $ 0.0 24.6 $ 0.4 $ 604.1 $ ( 41.3 ) $ 974.2 $ ( 606.2 ) $ 931.2

Net Income (loss) — — — — — 62.5 — 62.5

Foreign currency translation adjustment — — — — — 7.7 — — 7.7

Pension and post-retirement adjustments (net of tax of $ 0.1 )

— — — — — 0.2 — — 0.2

Stock-based compensation — — — — 2.2 — — — 2.2

Proceeds pursuant to stock-based compensation plans — — — — 4.0 — — — 4.0

Purchases of treasury stock at cost — — ( 3.9 ) — — — — ( 131.8 ) ( 131.8 )

Treasury stock issued pursuant to equity-based plans — — 0.2 — ( 7.3 ) — — 7.8 0.5

Dividends ($ 0.20 per share)

— — — — — — ( 4.6 ) — ( 4.6 )

Balance at February 28, 2026 0.8 $ 0.0 20.9 $ 0.4 $ 603.0 $ ( 33.4 ) $ 1,032.1 $ ( 730.2 ) $ 871.9

See accompanying notes

2 unchanged sentences

(Dollar amounts in millions)

Six months ended

November 30, November 30,

Nine months ended

February 28, 2026 February 28, 2025

Cash flows - operating activities:

13 unchanged sentences

Non cash write off related to asset impairments and write downs 9.4 0.4

Gain on sale and leaseback transactions ( 118.2 ) —

Changes in assets and liabilities, net of amounts acquired:

18 unchanged sentences

Additions to property, plant and equipment ( 33.4 ) ( 39.9 )

Net proceeds from sale and leaseback transactions 452.4 —

Acquisitions, net of cash acquired — ( 176.2 )

Other, net — ( 0.1 )

Net cash provided by (used in) investing activities 406.0 ( 232.0 )

8 unchanged sentences

Payment of dividends ( 15.4 ) ( 17.0 )

Other, net — ( 0.1 )

Net cash provided by (used in) financing activities ( 386.9 ) 197.6

40 unchanged sentences

• Cost of goods sold from book fair operations during interim periods based on estimated gross profit rates

• Sales tax contingencies

• Royalty advance reserves and royalty expense accruals

2 unchanged sentences

• Assets and liabilities acquired in business combinations

• Variable consideration related to anticipated returns

SCHOLASTIC CORPORATION

1 unchanged sentence

(Dollar amounts in millions, except per share data)

• Variable consideration related to anticipated returns

• Allocation of transaction price to contractual performance obligations

Recently Issued Accounting Pronouncements

In September 2025, the Financial Accounting Standards Board ("FASB") issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software." The amendments in this Update remove all references to prescriptive and sequential software development stages throughout Subtopic 350-40.

In December 2025, the Financial Accounting Standards Board ("FASB") issued ASU 2025-10, "Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities." The amendments in this Update establish the accounting for a government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income.

A grant related to an asset is a government grant, or part of a government grant, that is conditioned on the purchase, construction, or acquisition of an asset (for example, a long-lived asset or inventory).

A grant related to income is a government grant, or part of a government grant, other than a grant related to an asset (for example, a grant that reimburses a business entity for operating expenses).

The update provides guidance for the recognition, measurement, and presentation of government grants.

This ASU applies to government tax credits that the Company receives related to film, television and digital media production and distribution.

The ASU is effective for the Company's fiscal year 2030 and early adoption is permitted.

The Company is currently assessing the impact of this ASU on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software." The amendments in this Update remove all references to prescriptive and sequential software development stages throughout Subtopic 350-40.

Therefore, an entity is required to start capitalizing software costs when both of the following occur:

21 unchanged sentences

This ASU will be effective for the Company's annual disclosures for fiscal year 2026 and the Company will apply the amendments prospectively.

The Company expects the adoption of this ASU to primarily result in additional disclosures related to tax rates for certain individual states.

Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2025 for more information on current applicable authoritative guidance and its impact on the Company's financial statements.

SCHOLASTIC CORPORATION

1 unchanged sentence

(Dollar amounts in millions, except per share data)

The Company expects the adoption of this ASU to primarily result in additional disclosures related to tax rates for certain individual states.

Disaggregated Revenue Data

The following table presents the Company’s segment revenues disaggregated by region and domestic channel:

Three months ended Six months ended

November 30, November 30, November 30, November 30,

Three months ended Nine months ended

February 28, February 28, February 28, February 28,

2026 2025 2026 2025

28 unchanged sentences

(5) Overhead includes rental income related to leased space in the Company's headquarters.

As a result of the sale and leaseback transactions, the Company no longer owns the leasable space.

Refer to Note 4, "Sale and Leaseback Transactions", and Note 12, "Leases", for further details.

Estimated Returns

A liability for expected returns of $ 39.5 , $ 34.4 , and $ 34.8 is recorded within Other accrued expenses as of November 30, 2025, May 31, 2025, and November 30, 2024, respectively.

In addition, a return asset of $ 3.4 , $ 3.7 , and $ 4.0 is recorded within Prepaid expenses and other current assets as of November 30, 2025, May 31, 2025, and November 30, 2024, respectively, for the recoverable cost of product estimated to be returned by customers.

A liability for expected returns of $ 36.9 , $ 34.4 , and $ 33.3 is recorded within Other accrued expenses as of February 28, 2026, May 31, 2025, and February 28, 2025, respectively.

In addition, a return asset of $ 3.5 , $ 3.7 , and $ 3.8 is recorded within Prepaid expenses and other current assets as of February 28, 2026, May 31, 2025, and February 28, 2025, respectively, for the recoverable cost of product estimated to be returned by customers.

SCHOLASTIC CORPORATION

3 unchanged sentences

The following table presents further detail regarding the Company's contract liabilities as of the dates indicated:

November 30, 2025 May 31, 2025 November 30, 2024

February 28, 2026 May 31, 2025 February 28, 2025

Book fairs incentive credits $ 121.9 $ 122.1 $ 116.8

10 unchanged sentences

The Company's contract liabilities consist of advance billings and payments received from customers in excess of revenue recognized and revenue allocated to outstanding book fairs incentive credits.

Contract liabilities of $ 227.2 , $ 178.8 and $ 225.0 as of November 30, 2025, May 31, 2025 and November 30, 2024, respectively, are recorded within Deferred revenue on the Company's Condensed Consolidated Balance Sheets and are classified as short term, as substantially all of the associated performance obligations are expected to be satisfied, and related revenue recognized, within one year.

The remaining $ 3.3 , $ 4.2 and $ 5.9 of contract liabilities as of November 30, 2025, May 31, 2025 and November 30, 2024, respectively, are recorded within Other noncurrent liabilities on the Company's Condensed Consolidated Balance Sheets as the associated performance obligations are expected to be satisfied, and related revenue recognized, in excess of one year.

The Company recognized revenue which was included in the opening Deferred revenue balance in the amount of $ 43.3 and $ 80.3 for the three and six months ended November 30, 2025, respectively, and $ 41.9 and $ 71.1 for the three and six months ended November 30, 2024, respectively.

Contract liabilities of $ 213.7 , $ 178.8 and $ 205.2 as of February 28, 2026, May 31, 2025 and February 28, 2025, respectively, are recorded within Deferred revenue on the Company's Condensed Consolidated Balance Sheets and are classified as short term, as substantially all of the associated performance obligations are expected to be satisfied, and related revenue recognized, within one year.

The remaining $ 2.9 , $ 4.2 and $ 5.1 of contract liabilities as of February 28, 2026, May 31, 2025 and February 28, 2025, respectively, are recorded within Other noncurrent liabilities on the Company's Condensed Consolidated Balance Sheets as the associated performance obligations are expected to be satisfied, and related revenue recognized, in excess of one year.

The Company recognized revenue which was included in the opening Deferred revenue balance in the amount of $ 35.7 and $ 116.0 for the three and nine months ended February 28, 2026, respectively, and $ 35.1 and $ 106.2 for the three and nine months ended February 28, 2025, respectively.

Allowance for Credit Losses

The Company recognizes an allowance for credit losses on customer receivables that are expected to be incurred over the lifetime of the receivable.

Reserves for estimated credit losses are established at the time of sale and are based on relevant information about past events, current conditions, and supportable forecasts impacting its ultimate collectability, including specific reserves on a customer-by-customer basis, creditworthiness of the Company’s customers and prior collection experience.

Reserves for estimated credit losses are established at the time of sale and are based on relevant information about past events, current conditions, and supportable forecasts impacting ultimate collectability, including specific reserves on a customer-by-customer basis, creditworthiness of the Company’s customers and prior collection experience.

The Company reviews new information as it becomes available and makes adjustments to the reserves accordingly.

9 unchanged sentences

Balance as of November 30, 2025 $ 11.7

Provision (benefit) 0.9

Write-offs and other ( 1.8 )

Balance as of February 28, 2026 $ 10.8

SCHOLASTIC CORPORATION

19 unchanged sentences

(Dollar amounts in millions, except per share data)

Three months ended November 30, 2025

Three months ended February 28, 2026

Children's Book Publishing and Distribution Education Solutions Entertainment International Overhead (1)

5 unchanged sentences

Depreciation and amortization 5.6 2.9 3.1 1.3 — 12.9

Other segment items (4)

— 3.4 5.2 — — 8.6

Operating income (loss) $ 8.9 $ ( 5.2 ) $ ( 3.5 ) $ ( 4.7 ) $ ( 22.4 ) $ ( 26.9 )

1 unchanged sentence

Other components of net periodic benefit (cost) ( 0.3 )

Other non-operating income (expense) ( 1.6 )

Gain on sale and leaseback transactions 119.8

Earnings (loss) before income taxes $ 91.8

3 unchanged sentences

(1) Overhead includes all domestic corporate amounts not allocated to segments, including expenses and costs related to the management of corporate assets and rental income related to leased space in the Company's headquarters.

As a result of the sale and leaseback transactions, the Company no longer owns the leasable space.

Refer to Note 4, "Sale and Leaseback Transactions", and Note 12, "Leases", for further details.

(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

1 unchanged sentence

Income of less than $ 0.1 and $ 0.1 was recognized within the Entertainment and International segments, respectively.

(4) Other segment items include asset impairments and write downs.

(5) Segment assets within Overhead include assets held for sale.

Refer to Note 4, "Assets and Liabilities Held for Sale," for further details.

Three months ended November 30, 2024

Three months ended February 28, 2025

Children's Book Publishing and Distribution Education Solutions Entertainment International Overhead (1)

17 unchanged sentences

(3) Selling, general and administrative expenses includes equity in the net income (loss) of investees accounted for by the equity method.

Income of less than $ 0.1 and $ 0.6 was recognized in the Entertainment and International segments, respectively.

Income of $ 0.1 and loss of $ 0.1 was recognized in the Entertainment and International segments, respectively.

(4) Other segment items include asset impairments and write downs.

2 unchanged sentences

(Dollar amounts in millions, except per share data)

Six months ended November 30, 2025

Nine months ended February 28, 2026

Children's Book Publishing and Distribution Education Solutions Entertainment International Overhead (1)

10 unchanged sentences

Other components of net periodic benefit (cost) ( 1.0 )

Other non-operating income (expense) ( 1.6 )

Gain on sale and leaseback transactions 118.2

Earnings (loss) before income taxes $ 70.7

4 unchanged sentences

As a result of the sale and leaseback transactions, the Company no longer owns the leasable space.

Refer to Note 4, "Sale and Leaseback Transactions", and Note 12, "Leases", for further details.

(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

(3) Selling, general and administrative expenses includes equity in the net income (loss) of investees accounted for by the equity method.

A loss of less than $ 0.1 and income of $ 0.3 , was recognized within the Entertainment and International segments, respectively.

Income of less than $ 0.1 and income of $ 0.4 , was recognized within the Entertainment and International segments, respectively.

(4) Other segment items include asset impairments and write downs.

(5) Segment assets within Overhead include assets held for sale.

Refer to Note 4, "Assets and Liabilities Held for Sale," for further details.

Six months ended November 30, 2024

Nine months ended February 28, 2025

Children's Book Publishing and Distribution Education Solutions Entertainment International Overhead (1)

24 unchanged sentences

Revenues are attributed to locations based on the origin of sale.

Three months ended November 30, Six months ended November 30,

Three months ended February 28, Nine months ended February 28,

2026 2025 2026 2025

4 unchanged sentences

Long-lived assets consist of property, plant and equipment, net, excluding capitalized software.

November 30, 2025 November 30, 2024

February 28, 2026 February 28, 2025

United States $ 99.2 $ 428.9

$ 89.7 $ 438.9

International 38.5 31.7

Total Long-lived assets $ 137.7 $ 460.6

(1) Long-lived assets excludes assets held for sale.

Refer to Note 4, "Assets and Liabilities Held for Sale," for further details.

ASSETS AND LIABILITIES HELD FOR SALE

During the second quarter of fiscal 2026, the Company committed to a plan to sell the buildings located at 555-557 Broadway in New York, NY (SoHo), which comprise the Company's headquarters, and its primary distribution facility in Jefferson City, MO.

Refer to Note 19, "Subsequent Events," for details regarding the sale-leaseback agreements entered into subsequent to November 30, 2025.

At November 30, 2025, the Company determined that the criteria has been met for classification as held for sale in accordance with ASC 360, Property, Plant, and Equipment .

Upon classification, the assets held for sale were measured at the lower of carrying value or fair value less costs to sell and no further depreciation is recorded.

Based on the Company's assessment, the fair value less costs to sell exceeded the carrying value and therefore no impairment loss was recognized.

These assets are included in Overhead .

The Company expects the sale of each of these facilities to result in a gain on sale.

The following tables present the assets and liabilities held for sale by major asset class for each disposal group as of November 30, 2025:

SALE AND LEASEBACK TRANSACTIONS

On December 17, 2025, the Company completed the sale of its headquarters location at 555-557 Broadway in New York, NY (SoHo) for a sales price of $ 386.0 and its primary distribution facility in Jefferson City, MO for a sales price of $ 95.0 .

Concurrent with these sales, the Company entered into a 15 -year lease for a portion of its headquarters building ("SoHo lease") and a 20 -year lease for the distribution facility ("Jefferson City lease"), both with two 10 -year renewal options.

The Company determined that these transactions met the requirements for sale accounting in accordance with ASC 842 , Leases , and qualified as a sale in accordance with ASC 606 , Revenue from Contracts with Customers , as control of the assets transferred to the buyer-lessors.

The Company concluded that both the sales price and leaseback payments for these transactions were at fair value.

The assets related to these properties were included in Overhead and had a net carrying value on the date of sale of $ 334.2 .

These assets were classified as held for sale as of November 30, 2025, with minor adjustments recorded during the quarter ended February 28, 2026.

The Company recognized a total pre-tax gain of $ 118.2 , inclusive of transaction costs incurred during the three months ended November 30, 2025, which is included in Gain on sale and leaseback transactions within the Company's Condensed Consolidated Statement of Operations for the three and nine months ended February 28, 2026, and pre-tax net proceeds of $ 452.4 .

The following table presents the carrying value of the assets and liabilities by major asset class for each disposal group as of the date of the sale:

SoHo Headquarters Jefferson City Distribution Facility Total

1 unchanged sentence

Building and improvements 240.7 10.8 251.5

Equipment 0.1 0.1 0.2

Furniture, fixtures and equipment 1.0 0.1 1.1

Prepaid expenses and other current assets (1)

Other assets and deferred charges (1)

Total Assets held for sale $ 335.2 $ 15.5 $ 350.7

Total Assets $ 337.1 $ 15.5 $ 352.6

Deferred tax liabilities $ 17.5 $ 0.9 $ 18.4

Total Liabilities held for sale $ 17.6 $ 0.9 $ 18.5

Total Liabilities $ 17.5 $ 0.9 $ 18.4

Net Carrying Value $ 319.6 $ 14.6 $ 334.2

(1) Includes current and noncurrent deferred lease income and deferred lease costs.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

ASC 842 provides a practical expedient that permits the combination of lease and non-lease components in the measurement of right-of-use ("ROU") assets and lease liabilities.

The practical expedient is applied as an accounting policy election by class of underlying assets.

As a result of entering into the SoHo lease, the Company established a new class of underlying assets, corporate headquarters, and elected not to apply the practical expedient for this class.

As a result, only the portion of consideration attributed to the lease component is included in the measurement of the related ROU asset and lease liability.

The non-lease components included in the SoHo lease, primarily consisting of common‑area maintenance, utilities, insurance, real estate taxes and other operating costs, were estimated using historical cost information from the period in which the Company owned and operated the building prior to entering into the lease.

The Company believes that these historical operating costs reasonably approximate the expected stand‑alone prices of the non‑lease components under the new lease arrangement.

The SoHo and Jefferson City leases are classified as operating leases in accordance with ASC 842 .

The initial annual base rent for the SoHo lease is $ 11.7 , excluding estimated non-lease components, and escalates approximately 4 % annually.

The initial annual base rent for the Jefferson City lease is $ 6.9 and escalates 1 % to 4 % annually based on the Consumer Price Index.

The Company recorded an initial ROU asset and lease liability related to the SoHo and Jefferson City leases of $ 113.8 and $ 62.2 , respectively.

The operating lease cost associated with these leases is approximately $ 23.7 annually.

The lease measurement is based on the initial lease term as the Company is not reasonably certain to exercise the renewal options.

The Company used an incremental borrowing rate of 10.4 % to measure the lease liabilities.

In developing this rate, the Company considered its credit profile, including its higher leverage position at the time of the sale and leaseback transactions, observable market yields on secured and unsecured borrowings, interest‑rate spreads for comparable companies and transactions, and the longer lease terms.

Refer to Note 12, Leases, for further details regarding the impact of these transactions.

ASSET WRITE DOWN

2 unchanged sentences

The assets consisted of capitalized costs related to cloud computing arrangements and were included within the Children's Book Publishing and Distribution segment.

Accordingly, the Company

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

recognized an impairment charge of $ 0.8 which was included in Asset impairments and write downs within the Company's Condensed Consolidated Statement of Operations for the three months ended August 31, 2025.

Accordingly, the Company recognized an impairment charge of $ 0.8 during the three months ended August 31, 2025.

During the second quarter of fiscal 2026, the Company identified assets that were not recoverable as the Company ceased development activities for certain education products and film and television programs.

The related assets consisted of prepublication costs of $ 3.4 included in the Education Solutions segment and investment in film and television programs and other production costs of $ 4.9 included in the Entertainment segment.

In addition, the Company identified indicators of impairment related to its 12 % ownership interest in a children's book publishing business located in the UK as the business is being wound down.

In addition, the Company identified indicators of impairment related to its 12 % ownership interest in a children's book publishing business located in the UK as the business has been wound down.

This investment had a carrying value of $ 0.3 and was included in the Entertainment segment.

The Company performed an assessment and concluded the investment was not recoverable.

Accordingly, the Company recognized total impairment charges of $ 8.6 which were included in Asset impairments and write downs within the Company's Condensed Consolidated Statement of Operations for the three months ended November 30, 2025.

The related impact of the impairments was a loss per basic and diluted share of Class A and Common Stock of $ 0.26 and $ 0.25 , respectively, in the three months ended November 30, 2025.

For the six months ended November 30, 2025, the related impact of the total impairment charges of $ 9.4 was a loss per basic and diluted share of Class A and Common Stock of $ 0.28 .

Accordingly, the Company recognized total impairment charges of $ 8.6 during the three months ended November 30, 2025.

There were no impairment charges recorded during the three months ended February 28, 2026.

Total impairment charges of $ 9.4 were included in Asset impairments and write downs within the Company's Condensed Consolidated Statement of Operations for the nine months ended February 28, 2026.

The following table summarizes the carrying value of the Company's debt, excluding film related obligations, as of the dates indicated:

November 30, 2025 May 31, 2025 November 30, 2024

February 28, 2026 May 31, 2025 February 28, 2025

Credit Agreement $ — $ 250.0 $ 275.0

3 unchanged sentences

Total long-term debt $ — $ 250.0 $ 275.0

The following table sets forth the maturities of the carrying values of the Company's debt obligations, excluding film related obligations, as of November 30, 2025 for the twelve month periods ended November 30:

Total Debt $ 280.6

The Company's debt obligations as of February 28, 2026 have maturities of one year or less.

Credit Agreement

6 unchanged sentences

• a Term SOFR Advance equal to the Term SOFR rate plus an applicable margin ranging from 1.625 % to 1.875 %, as determined by the Company’s prevailing Consolidated Net Leverage Ratio (as defined in the Credit Agreement).

As of November 30, 2025, the applicable margin on Base Rate Advances was 0.75 % and the applicable margin on SOFR Advances was 1.75 %.

As of February 28, 2026, the applicable margin on Base Rate Advances was 0.75 % and the applicable margin on SOFR Advances was 1.75 %.

The Credit Agreement provides for payment of a commitment fee in respect of the aggregate unused amount of revolving credit commitments ranging from 0.20 % to 0.30 % per annum based upon the Corporation’s then prevailing Consolidated Net Leverage Ratio.

As of November 30, 2025, the commitment fee rate was 0.25 %.

As of February 28, 2026, the commitment fee rate was 0.25 %.

A portion of the revolving credit facility, up to a maximum of $ 50.0 , is available for the issuance of letters of credit.

1 unchanged sentence

The Credit Agreement has an accordion feature which permits the Company, provided certain conditions are satisfied (as defined in the Credit Agreement), to increase the facility by up to an additional $ 150.0 .

As of November 30, 2025, the Company had outstanding borrowings of $ 275.0 under the Credit Agreement at a weighted average interest rate of 5.7 %.

While this obligation is not due until the November 26, 2029 maturity date, the Company may, from time to time, make payments to reduce this obligation when cash from operations becomes available for this purpose.

As of November 30, 2024, outstanding borrowings under the Credit Agreement were $ 250.0 at a weighted average interest rate of 6.8 %.

As of February 28, 2026, the Company had no outstanding borrowings under the Credit Agreement.

During the third quarter of fiscal 2026, the Company repaid $ 350.0 of borrowings.

As of February 28, 2025, outstanding borrowings under the Credit Agreement were $ 275.0 at a weighted average interest rate of 6.1 %.

The Credit Agreement contains certain financial covenants related to leverage and interest coverage ratios (as defined in the Credit Agreement), limitations on the amount of dividends and other distributions, and other limitations on fundamental changes to the Company or its business.

The Company was in compliance with required covenants for all periods presented.

At November 30, 2025, the Company had open standby letters of credit totaling $ 4.0 issued under certain credit lines, including $ 0.4 under the Credit Agreement and $ 3.6 under the domestic credit lines discussed below.

At February 28, 2026, the Company had open standby letters of credit totaling $ 4.0 issued under certain credit lines, including $ 0.4 under the Credit Agreement and $ 3.6 under the domestic credit lines discussed below.

Unsecured Lines of Credit

As of November 30, 2025, the Company’s domestic credit lines available under unsecured money market bid rate credit lines totaled $ 10.0 .

There were no outstanding borrowings under these credit lines as of November 30, 2025, May 31, 2025 and November 30, 2024.

As of November 30, 2025, availability under these unsecured money market bid rate credit lines totaled $ 6.4 , excluding commitments of $ 3.6 .

As of February 28, 2026, the Company’s domestic credit lines available under unsecured money market bid rate credit lines totaled $ 10.0 .

There were no outstanding borrowings under these credit lines as of February 28, 2026, May 31, 2025 and February 28, 2025.

As of February 28, 2026, availability under these unsecured money market bid rate credit lines totaled $ 6.4 , excluding commitments of $ 3.6 .

All loans made under these credit lines are at the sole discretion of the lender and at an interest rate and term agreed to at the time each loan is made, but not to exceed 365 days.

These credit lines may be renewed, if requested by the Company, at the option of the lender.

As of November 30, 2025, the Company had various local currency international credit lines totaling $ 31.6 underwritten by banks primarily in the United States, Australia, Canada and the United Kingdom.

Outstanding borrowings under these facilities were $ 5.6 at November 30, 2025 at a weighted average interest rate of 4.4 %, compared to outstanding borrowings of $ 6.2 at May 31, 2025 at a weighted average interest rate of 4.5 %, and $ 6.2 at November 30, 2024 at a weighted average interest rate of 4.2 %.

As of November 30, 2025, the amounts

available under these facilities totaled $ 26.0 .

As of February 28, 2026, the Company had various local currency international credit lines totaling $ 28.1 underwritten by banks primarily in the United States, Australia, Canada and the United Kingdom.

Outstanding borrowings under these facilities were $ 5.6 at February 28, 2026 at a weighted average interest rate of 4.2 %, compared to outstanding borrowings of $ 6.2 at May 31, 2025 at a weighted average interest rate of 4.5 %, and $ 5.8 at February 28, 2025 at a weighted average interest rate of 4.9 %.

As of February 28, 2026, the amounts available under these facilities totaled $ 22.5 .

These credit lines are typically available for overdraft borrowings or loans up to 364 days and may be renewed, if requested by the Company, at the sole option of the lender.

2 unchanged sentences

The interim production credit facilities are secured by an assignment and direction of specific production financing including tax credits and license contract receivables and are due on demand.

As of November 30, 2025, interest is charged at the following rates:

As of February 28, 2026, interest is charged at the following rates:

• the bank prime rate plus a margin ranging from 0.50 % to 0.75 % for Canadian dollar loans;

• SOFR plus a margin ranging from 2.25 % to 3.00 % for U.S.

Outstanding borrowings under these facilities were $ 14.8 at a weighted average interest rate of 5.5 % at November 30, 2025, $ 18.3 at a weighted average interest rate of 6.2 % at May 31, 2025 and $ 21.6 at a weighted average interest rate of 6.9 % at November 30, 2024, of which $ 8.3 were classified as current obligations.

• SOFR plus a margin of 3.00 % for U.S.

dollar loans;

• Euribor plus a margin of 2.00 % for Euro loans.

Outstanding borrowings under these facilities were $ 17.4 at a weighted average interest rate of 5.3 % at February 28, 2026, $ 18.3 at a weighted average interest rate of 6.2 % at May 31, 2025 and $ 18.8 at a weighted average interest rate of 6.3 % at February 28, 2025.

COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

The Company does not expect, in the case of those various claims and lawsuits arising in the normal course of business where a loss is considered probable or reasonably possible, that the reasonably possible losses from such claims and lawsuits (either individually or in the aggregate) would have a material adverse effect on the Company’s consolidated financial position or results of operations.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

The Company expects to receive additional recoveries from its insurance programs related to an intellectual property legal settlement accrued during fiscal 2021, however, it is premature to determine with any level of probability or accuracy the amount of those recoveries at this time.

Other Matters

As a result of a Supreme Court ruling issued in February 2026, the Company may be entitled to a refund of tariffs previously paid on imported products under the International Emergency Economic Powers Act (IEEPA).

The Company estimates that approximately $ 9.0 of its tariff payments are subject to this ruling.

As of February 28, 2026, the Company has not recognized an asset related to the potential refund.

The Company will continue to evaluate new information and will recognize the refund when the right to receive the amount becomes realized or realizable in accordance with ASC 450, Contingencies .

EARNINGS (LOSS) PER SHARE

The following table summarizes the reconciliation of the numerators and denominators for the basic and diluted earnings (loss) per share computation for the periods indicated:

Three months ended Six months ended

November 30, November 30,

Three months ended Nine months ended

February 28, February 28,

2026 2025 2026 2025

8 unchanged sentences

1.3 1.9 1.4 1.7

* The Company experienced a net loss for the six months ended November 30, 2025 and November 30, 2024 and therefore did not report any dilutive share impact.

The following potential common shares were excluded from the loss per diluted share computation as of November 30, 2025:

outstanding options and restricted stock units of 2.4 million and 0.7 million, respectively.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

* The Company experienced a net loss for the three and nine months ended February 28, 2025 and therefore did not report any dilutive share impact.

The following table sets forth options outstanding pursuant to stock-based compensation plans as of the dates indicated:

November 30, 2025 November 30, 2024

February 28, 2026 February 28, 2025

Options outstanding pursuant to stock-based compensation plans (in millions)

As of November 30, 2025, $ 70.0 remained available for future purchases of common shares under the repurchase authorization of the Board of Directors (the "Board") in effect on that date.

As of February 28, 2026, $ 19.5 remained available for future purchases of common shares under the repurchase authorization of the Board of Directors (the "Board") in effect on that date.

See Note 14, "Treasury Stock", for a more complete description of the Company’s share buy-back program and Note 20, "Subsequent Events" for additional Board authorization for Common share repurchases.

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The acquisition of 9 Story further enhances the Company's development, production and licensing interests, expanding opportunities to leverage its brand and best-selling publishing and global children's franchises across print, screen and merchandising.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

Pursuant to ASC Topic 810, Consolidation , 9 Story was determined to be a variable interest entity (VIE) and the Company was determined to be its primary beneficiary and therefore obtained a controlling financial interest over 9 Story.

4 unchanged sentences

The following table summarizes the purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition:

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

Cash and cash equivalents $ 17.5

35 unchanged sentences

The following table summarizes the activity in Goodwill for the periods indicated:

November 30, 2025 May 31, 2025 November 30, 2024

February 28, 2026 May 31, 2025 February 28, 2025

Gross beginning balance $ 238.5 $ 172.4 $ 172.4

6 unchanged sentences

The increase in the estimated fair value of the net assets acquired consisted of a decrease to deferred tax liabilities of $ 5.3 , an increase to operating lease right-of-use assets of $ 0.3 , a decrease to lease liabilities of $ 0.1 , an increase to the property, plant and equipment of $ 0.1 and a decrease to the purchase price as a result of a working capital adjustment of $ 0.1 .

The additions during the six months ended November 30, 2024 included measurement period adjustments for the 9 Story acquisition which reflected an increase to goodwill of $ 0.9 resulting from a net decrease in the estimated fair value of the net assets acquired.

The additions during the nine months ended February 28, 2025 included measurement period adjustments for the 9 Story acquisition which reflected an increase to goodwill of $ 0.9 resulting from a net decrease in the estimated fair value of the net assets acquired.

The decrease in the estimated fair value of the net assets acquired consisted of an increase to deferred tax liabilities of $ 1.4 , an increase to operating lease right-of-use assets of $ 0.3 , a decrease to lease liabilities of $ 0.1 , and a decrease to the purchase price as a result of a working capital adjustment of $ 0.1 .

3 unchanged sentences

The following table summarizes the activity on a year-to-date basis in Other intangible assets for the periods indicated:

November 30, 2025 May 31, 2025 November 30, 2024

February 28, 2026 May 31, 2025 February 28, 2025

Beginning balance - Other intangibles subject to amortization $ 85.8 $ 8.2 $ 8.2

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The following table summarizes the Company’s investments as of the dates indicated:

November 30, 2025 May 31, 2025 November 30, 2024 Segment

February 28, 2026 May 31, 2025 February 28, 2025 Segment

Equity method investments $ 34.1 $ 33.6 $ 31.6 International

10 unchanged sentences

These joint venture investments are accounted for using the equity method of accounting.

There have been no impairments or adjustments to the carrying value of these investments.

The acquired investments also include a 12 % ownership interest in a children's book publishing business located in the UK.

3 unchanged sentences

Income (loss) from equity investments is reported in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

For the three and six months ended November 30, 2025, the Company recognized income of $ 0.4 and $ 0.3 , respectively.

For the three and six months ended November 30, 2024, the Company recognized income of $ 0.6 and $ 0.8 , respectively.

The Company did not receive any dividends in the six months ended November 30, 2025 and November 30, 2024.

For the three and nine months ended February 28, 2026, the Company recognized income of $ 0.1 and $ 0.4 , respectively.

For the three and nine months ended February 28, 2025, the Company recognized a loss of less than $ 0.1 and income of $ 0.8 , respectively.

The Company did not receive any dividends in the nine months ended February 28, 2026 and February 28, 2025.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

The following table summarizes right-of-use assets and lease liabilities recorded on the Company's Consolidated Balance Sheet for the dates indicated:

February 28, 2026 May 31, 2025 February 28, 2025 Location within Consolidated Balance Sheets

Operating leases $ 264.1 $ 103.9 $ 98.8 Operating lease right-of-use assets, net

Finance leases 13.5 6.0 6.3 Property, plant and equipment, net

Total lease assets $ 277.6 $ 109.9 $ 105.1

Operating leases:

Current portion $ 27.7 $ 26.8 $ 25.5 Operating lease liabilities, current

Noncurrent portion 251.3 91.5 84.4 Operating lease liabilities, noncurrent

Total operating lease liabilities $ 279.0 $ 118.3 $ 109.9

Finance leases:

Current portion $ 3.1 $ 1.7 $ 1.6 Other accrued expenses

Noncurrent portion 11.3 4.9 5.2 Other noncurrent liabilities

Total finance lease liabilities $ 14.4 $ 6.6 $ 6.8

Total lease liabilities $ 293.4 $ 124.9 $ 116.7

The following table summarizes the lease expense activity for the periods indicated:

Three months ended Nine months ended Location within Consolidated Statements of Operations

February 28, February 28,

2026 2025 2026 2025

Operating lease expense $ 12.9 $ 8.0 $ 29.2 $ 23.7 Selling, general and administrative expenses

Finance lease costs :

Depreciation of leased assets 0.6 0.4 2.1 1.0 Depreciation and amortization

Accretion of lease liabilities 0.1 0.1 0.3 0.2 Interest expense

Total lease expense $ 13.6 $ 8.5 $ 31.6 $ 24.9

The following table summarizes certain cash flows information related to the Company's leases for the periods indicated:

Nine months ended

February 28, 2026 February 28, 2025

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases $ 28.8 $ 23.9

Operating cash flows from finance leases 0.3 0.2

Financing cash flows from finance leases 1.2 1.4

Noncash transactions:

Lease assets obtained in exchange for new lease liabilities $ 180.6 $ 15.6

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

The following table provides the maturities of the Company's lease liabilities recorded on the Company's Consolidated Balance Sheet for the period ended February 28, 2026:

Operating Leases Finance Leases

Remainder of Fiscal 2026 (1)

Fiscal 2027 49.9 3.3

Fiscal 2028 44.0 2.9

Fiscal 2029 36.6 2.4

Fiscal 2030 32.2 2.2

Thereafter 332.9 4.4

Total lease payments $ 508.8 $ 16.6

interest ( 229.8 ) ( 2.2 )

Total lease liabilities $ 279.0 $ 14.4

(1) Includes the remaining three months of the current fiscal year ending May 31, 2026.

The following table summarizes the weighted-average remaining lease terms and weighted-average discount rates related to the Company's leases recorded on the Company's Consolidated Balance Sheets for the periods indicated:

February 28, 2026 February 28, 2025

Weighted-average remaining lease term (years):

Operating Leases 12.3 5.3

Finance Leases 5.9 5.3

Weighted-average discount rate:

Operating Leases 8.6 % 5.6 %

Finance Leases 5.1 % 4.9 %

Prior to the sale and leaseback transactions that occurred in December 2025, the Company owned leasable space in its headquarters in SoHo, New York City.

The Company recognized rental income of $ 0.7 and $ 7.2 in the three and nine months ended February 28, 2026, respectively, and $ 2.8 and $ 8.4 in the three and nine months ended February 28, 2025, respectively.

STOCK-BASED COMPENSATION

The following table summarizes stock-based compensation expense included in Selling, general and administrative expenses for the periods indicated:

Three months ended Six months ended

November 30, November 30, November 30, November 30,

Three months ended Nine months ended

February 28, February 28, February 28, February 28,

2026 2025 2026 2025

8 unchanged sentences

The following table sets forth Common Stock issued pursuant to stock-based compensation plans for the periods indicated:

Three months ended Six months ended

November 30, November 30, November 30, November 30,

Three months ended Nine months ended

February 28, February 28, February 28, February 28,

2026 2025 2026 2025

5 unchanged sentences

March 2025 53.4

December 2025 80.0

Total current Board authorizations $ 188.0

Less repurchases made under these authorizations ( 168.5 )

Remaining Board authorization at November 30, 2025 $ 70.0

Remaining Board authorization at November 30, 2025 represents the amount remaining under the Board authorization for Common share repurchases announced on March 20, 2024 and the current $ 53.4 Board authorization for Common share repurchases announced on March 19, 2025, which is available for further repurchases, from time to time as conditions allow, on the open market or through privately negotiated transactions.

Remaining Board authorization at February 28, 2026 $ 19.5

Remaining Board authorization at February 28, 2026 represents the amount remaining under the Board authorization for Common share repurchases announced on December 17, 2025, which is available for further repurchases, from time to time as conditions allow, on the open market or through privately negotiated transactions.

See Note 20, "Subsequent Events", for additional Board authorization for Common share repurchases.

There were no repurchases of the Company's Common Stock during the six months ende d November 30, 2025.

Repurchases of the Company's Common Stock aggregated $ 131.8 , including excise tax on share repurchases, during the three and nine month periods ende d February 28, 2026.

The Company's repurchase program may be suspended at any time without prior notice.

4 unchanged sentences

The following tables summarize the activity in Accumulated other comprehensive income (loss), net of tax, by component, for the periods indicated:

Three months ended November 30, 2025

Three months ended February 28, 2026

Foreign currency translation adjustments Retirement benefit plans Total

Beginning balance at September 1, 2025 $ ( 32.5 ) $ ( 5.2 ) $ ( 37.7 )

Beginning balance at December 1, 2025 $ ( 36.3 ) $ ( 5.0 ) $ ( 41.3 )

Other comprehensive income (loss) before reclassifications 7.7 — 7.7

4 unchanged sentences

Other comprehensive income (loss) 7.7 0.2 7.9

Ending balance at November 30, 2025 $ ( 36.3 ) $ ( 5.0 ) $ ( 41.3 )

Three months ended November 30, 2024

Ending balance at February 28, 2026 $ ( 28.6 ) $ ( 4.8 ) $ ( 33.4 )

Three months ended February 28, 2025

Foreign currency translation adjustments Retirement benefit plans Total

Beginning balance at September 1, 2024 $ ( 38.7 ) $ ( 5.4 ) $ ( 44.1 )

Beginning balance at December 1, 2024 $ ( 50.6 ) $ ( 5.2 ) $ ( 55.8 )

Other comprehensive income (loss) before reclassifications ( 8.0 ) — ( 8.0 )

4 unchanged sentences

Other comprehensive income (loss) ( 8.0 ) 0.1 ( 7.9 )

Ending balance at November 30, 2024 $ ( 50.6 ) $ ( 5.2 ) $ ( 55.8 )

Six months ended November 30, 2025

Ending balance at February 28, 2025 $ ( 58.6 ) $ ( 5.1 ) $ ( 63.7 )

Nine months ended February 28, 2026

Foreign currency translation adjustments Retirement benefit plans Total

6 unchanged sentences

Other comprehensive income (loss) 7.4 0.7 8.1

Ending balance at November 30, 2025 $ ( 36.3 ) $ ( 5.0 ) $ ( 41.3 )

Six months ended November 30, 2024

Ending balance at February 28, 2026 $ ( 28.6 ) $ ( 4.8 ) $ ( 33.4 )

Nine months ended February 28, 2025

Foreign currency translation adjustments Retirement benefit plans Total

6 unchanged sentences

Other comprehensive income (loss) ( 11.7 ) 0.5 ( 11.2 )

Ending balance at November 30, 2024 $ ( 50.6 ) $ ( 5.2 ) $ ( 55.8 )

Ending balance at February 28, 2025 $ ( 58.6 ) $ ( 5.1 ) $ ( 63.7 )

SCHOLASTIC CORPORATION

2 unchanged sentences

The following table presents the impact on earnings of reclassifications out of Accumulated other comprehensive income (loss) for the periods indicated:

Three months ended Six months ended Condensed Consolidated Statements of Operations line item

November 30, November 30, November 30, November 30,

Three months ended Nine months ended Condensed Consolidated Statements of Operations line item

February 28, February 28, February 28, February 28,

2026 2025 2026 2025

22 unchanged sentences

Level 2 and Level 3 inputs are employed by the Company in the fair value measurement of these assets.

See Note 4, "Assets and Liabilities Held For Sale," for a more detailed description of the fair value measurement of assets held for sale.

For the fair value measurements employed by the Company for certain capitalized costs related to cloud computing arrangements, prepublication costs, investment in film and television assets and other production costs, the Company assessed future expected cash flows attributable to these assets, a Level 3 fair value measure.

10 unchanged sentences

The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or regulatory or tax law changes.

The Company's interim effective tax rate, inclusive of discrete items, for the three and six month periods ended November 30, 2025 was 26.4 % and 28.0 %, respectively, compared to 30.3 % and 37.2 %, respectively, for the prior fiscal year period.

The interim effective tax rate for the six months ended November 30, 2025 varies from the statutory rate primarily due to non-deductible compensation for covered executive employees and expected state and local income tax.

The Company's interim effective tax rate, inclusive of discrete items, for the three and nine month periods ended February 28, 2026 was 31.9 % and 33.1 %, respectively, compared to 87.3 % and 65.5 %, respectively, for the prior fiscal year period.

The interim effective tax rate for the nine months ended February 28, 2026 varies from the statutory rate primarily due to non-deductible compensation for covered executive employees and expected state and local income tax.

The Company, including its domestic subsidiaries, files a consolidated U.S.

25 unchanged sentences

The Company marks-to-market these instruments and records the changes in the fair value of these items in Selling, general and administrative expenses and recognizes the unrealized gain or loss in Other current assets or Other current liabilities.

The notional values of the contracts were $ 22.8 as of November 30, 2025 and November 30, 2024.

A net unrealized gain of less than $ 0.1 and $ 0.6 was recognized for the six months ended November 30, 2025 and November 30, 2024, respectively.

The notional values of the contracts were $ 21.3 and $ 22.8 as of February 28, 2026 and February 28, 2025, respectively.

A net unrealized loss of $ 0.6 and a net unrealized gain of $ 0.9 was recognized for the nine months ended February 28, 2026 and February 28, 2025, respectively.

OTHER ACCRUED EXPENSES

Other accrued expenses consisted of the following as of the dates indicated:

November 30, 2025 May 31, 2025 November 30, 2024

February 28, 2026 May 31, 2025 February 28, 2025

Accrued payroll, payroll taxes and benefits $ 29.0 $ 35.2 $ 28.0

6 unchanged sentences

SUBSEQUENT EVENTS

On December 1, 2025, the Company entered into agreements to sell its headquarters location at 555-557 Broadway in New York, NY for a purchase price of $ 386.0 and its primary distribution facility in Jefferson City, MO for a purchase price of $ 95.0 .

Upon closing of these transactions, which occurred on December 17, 2025, the Company entered into a 15 -year lease for a portion of its headquarters building and a 20 -year lease for the distribution facility, both with renewal options.

The Company expects these leases to be classified as operating leases.

On December 17, 2025, the Board declared a quarterly cash dividend of $ 0.20 per share on the Company’s Class A and Common Stock for the third quarter of fiscal 2026.

The dividend is payable on March 16, 2026 to shareholders of record as of the close of business on January 30, 2026.

On December 17, 2025, the Board also authorized an increase of $ 80.0 for Common share repurchases under the Company's share buy-back program, resulting in a current Board authorization of $ 150.0 , which includes $ 70.0 remaining from the previous Board authorization.

On March 18, 2026, the Board declared a quarterly cash dividend of $ 0.20 per share on the Company’s Class A and Common Stock for the fourth quarter of fiscal 2026.

The dividend is payable on June 15, 2026 to shareholders of record as of the close of business on April 30, 2026.

On March 18, 2026, the Board also authorized an increase of $ 297.0 for Common share repurchases under the Company's share buy-back program, resulting in a current Board authorization of $ 300.0 , which includes $ 19.5 remaining from the previous Board authorization, less repurchases of $ 16.5 made subsequent to February 28, 2026.

The increased authorization includes a planned modified Dutch auction tender offer of $ 200.0 with the remaining $ 100.0 plus any unutilized portion of the tender offer amount available for open-market and other authorized share repurchases.

SCHOLASTIC CORPORATION

1 unchanged sentence

Overview and Outlook

Revenues for the second quarter ended November 30, 2025 were $551.1 million, compared to $544.6 million in the prior fiscal year quarter, a increase of $6.5 million or 1%.

The Company reported net income per diluted share of Class A and Common Stock of $2.17 in the second quarter of fiscal 2026, compared to $1.71 in the prior fiscal year quarter.

Second quarter results reflected higher revenues from the global release of the 14th title in Dav Pilkey's Dog Man ® series, Big Jim Believes , coupled with continued success of the Hunger Games ® and Harry Potter ® franchises with special edition releases.

School Reading Events also had a successful fall season with higher fair count and increased revenue per fair.

The volatility in the education funding environment continued to impact Education Solutions as schools delayed or reduced purchases.

However, this decline was more than offset by the continued benefits from the Company's previous reorganization efforts and cost-saving initiatives, resulting in improved operating income in the second quarter.

During the second half of fiscal 2026, the Company expects the positive trends related to fair count and revenue per fair to continue into the spring book fairs season.

The Company is also expecting to benefit from new trade publishing releases, including Captain Underpants:

The First Epic Manga , illustrated by manga artist Motojiro, in April, the 16th Wings of Fire book, The Hybrid Prince, in March, and the graphic novel edition of the 9th book in the series Talons of Power in late December.

The Company remains focused on improving profitability and building value for shareholders.

Revenues for the third quarter ended February 28, 2026 were $329.1 million, compared to $335.4 million in the prior fiscal year quarter, a decrease of $6.3 million or 2%.

The Company reported net income per diluted share of Class A and Common Stock of $2.55 in the third quarter of fiscal 2026, compared to net loss per diluted share of $0.13 in the prior fiscal year quarter.

During the third fiscal quarter, the Company closed on the sale and leaseback transactions related to its headquarters in New York City and distribution center in Jefferson City, which resulted in pre-tax net proceeds of $452.4 million and a pre-tax gain on sale of $118.2 million.

The Company used this capital to repay borrowings under its U.S.

Credit Agreement and return value to shareholders through open-market share repurchases while continuing to invest in initiatives that support long-term growth.

Within Children's Book Publishing and Distribution , School Reading Events continued to outpace the prior period, driven by higher revenue per fair.

Trade channel revenues reflected the shift in timing of the Dog Man ® publication, with year-to-date results remaining in line with the prior fiscal year period.

The trade channel is expected to benefit from new releases in the fourth fiscal quarter including Wings of Fire #16:

The Hybrid Prince , published in early March, and Captain Underpants:

The First Epic Manga to be published in April.

Education Solutions continued to be impacted by the challenging funding market for schools and districts, however, the segment benefited from its lower cost structure which resulted in improved profitability in the third fiscal quarter.

The Entertainment segment continued to expand its pipeline of media development and production and remains well-positioned for growth as industry greenlight activity improves.

International results reflected the expected impact of the Dog Man publication timing in the Major Markets and the continued benefit of operational efficiencies.

The Company remains focused on growth and margin improvement in its international operations.

Results of Operations

Revenues for the quarter ended November 30, 2025 increased by $6.5 million to $551.1 million, compared to $544.6 million in the prior fiscal year quarter.

Within the Children's Book Publishing and Distribution segment, revenues increased by $13.9 million, driven by increased trade channel revenues from new releases in the Dog Man ® , Hunger Games ® and Harry Potter ® series as well as increased revenues from School Reading Events as a result of higher fair count and increased revenue per fair.

In the Education Solutions segment, revenues decreased by $9.0 million primarily due to delayed or reduced school funding which resulted in lower sales of supplemental programs.

In the Entertainment segment, revenues decreased by $1.7 million, reflecting lower production and distribution revenues.

In local currency, International segment revenues increased by $3.3 million, primarily driven by higher sales in the Company's Major Markets which benefited from the release of Dog Man #14.

International segment revenues were impacted by unfavorable foreign exchange of $0.5 million in the quarter ended November 30, 2025.

In addition, rental income increased $0.5 million from the prior fiscal year quarter.

Revenues for the six months ended November 30, 2025 decreased by $5.1 million to $776.7 million, compared to $781.8 million in the prior fiscal year period.

Revenues in the Children's Book Publishing and Distribution segment increased by $17.9 million, driven by increased revenues from School Reading Events as a result of higher fair count and increased revenue per fair as well as increased redemptions of book fair incentive program credits, coupled with increased trade channel revenues with new releases and continued success in the Dog Man ® , Hunger Games ® and Harry Potter ® franchises.

In the Education Solutions segment, revenues decreased by $24.6 million, primarily due to delayed or reduced school funding which resulted in lower sales of supplemental programs.

Revenues for the quarter ended February 28, 2026 decreased by $6.3 million to $329.1 million, compared to $335.4 million in the prior fiscal year quarter.

Within the Children's Book Publishing and Distribution segment, revenues decreased by $5.7 million, driven by lower trade channel revenues reflecting the shift in timing of the Dog Man publication which occurred in the second fiscal quarter compared to the third fiscal quarter in the prior year, partially offset by increased revenues from School Reading Events as a result of higher revenue per fair.

In the Education Solutions segment, revenues decreased by $1.1 million, primarily driven by lower sales of supplemental curriculum products and lower subscription revenues from Magazines+, partially offset by increased revenues from sponsored programs.

In the Entertainment segment, revenues increased by $3.2 million, reflecting higher production revenues from episodic deliveries and services.

In local currency, International segment revenues decreased by $4.1 million, primarily driven by lower trade channel sales in the U.K.and Canada due, in part, to the timing shift of the Dog Man publication, coupled with lower education sales in New Zealand.

International segment revenues were impacted by favorable foreign exchange of $3.5 million in the quarter ended February 28, 2026.

In addition, rental income decreased $2.1 million from the prior fiscal year quarter as a result of the sale and leaseback of the Company's headquarters in New York City as the Company no longer owns the leasable space.

Revenues for the nine months ended February 28, 2026 decreased by $11.4 million to $1,105.8 million, compared to $1,117.2 million in the prior fiscal year period.

Revenues in the Children's Book Publishing and Distribution segment increased by $12.2 million, driven by increased revenues from School Reading Events as a result of higher fair count and increased revenue per fair as well as increased redemptions of book fair incentive program credits.

In the Education Solutions segment, revenues decreased by $25.7 million, primarily due to the continued challenging funding market for schools and school districts which resulted in lower sales of supplemental curriculum products and lower subscription revenues from Magazines+.

In the Entertainment segment, revenues decreased by $1.5 million, primarily reflecting lower production and distribution revenues.

In local currency, International segment revenues increased by $5.7 million, primarily driven by higher sales in the U.K., Australia and New Zealand, and Asia.

International segment revenues were impacted by unfavorable foreign exchange of $0.3 million in the period ended November 30, 2025.

In addition, rental income increased $0.9 million from the prior fiscal year period.

In local currency, International segment revenues increased by $1.6 million, primarily driven by higher sales in Australia, Asia and the U.K.

International segment revenues were also impacted by favorable foreign exchange of $3.2 million in the period ended February 28, 2026.

In addition, rental income decreased $1.2 million from the

SCHOLASTIC CORPORATION

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements